PayPal partners with 15 retailers in big offline push

PayPal may already be ubiquitous on the web, but the payments giant has its sights set on much bigger fish offline.

In an effort to bring PayPal purchasing to the masses wherever they shop, the company yesterday announced pacts with 15 major retailers in the United States that will give consumers the ability to pay for their purchases using PayPal.

The merchants teaming up with PayPal are some of the biggest retail brands in the United States and include Toys R Us, Barnes & Noble and J.C. Penney. They join other early partners like Home Depot, which offers PayPal as a payment option in some 2,000 of its stores.

PayPal's Don Kingsborough calls this latest group of retail partners "our first installment" and promised that others would be coming on board in the near future. To that end, PayPal also announced yesterday a pact with point-of-sale (POS) vendor VeriFone, which will put a variety of PayPal checkout options on VeriFone POS systems. VeriFone, of course, has been moving aggressively to protect its position in the payments market as established financial institutions and upstarts alike try to tap into all of the new opportunities mobile technologies are creating to give consumers new payment options.

To start, PayPal solutions will be rolled out on the POS solutions that are used by VeriFone's largest retailers, but there's room to grow; as the companies' press release notes, VeriFone's customer base consists of 80% of the top 200 retailers in the United States.

The multi-billion dollar question, of course, is whether PayPal's ubiquity online will help it expand successfully offline. While PayPal's sizable user base and recognizable brand make offering PayPal payment options a decent bet for retailers, it's not yet clear whether consumers are going to embrace these payment options.

The good news for PayPal is that in its effort to become a big player offline, it can more easily open doors its upstart competitors can't. While companies like Square, which in many cases lack defensible technologies, have to work hard to sign up individual small business customers and to break into lucrative but relatively small verticals, the deals PayPal announced yesterday suggest that it's going to be able to scale its offline initiatives quite quickly and efficiently.

In the battle for the future of the payments space, that could prove to be a crucial advantage.

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